USA v. Metter Et Al Doc 332 Filed 02 Dec 13

8/13/2019 USA v. Metter Et Al Doc 332 Filed 02 Dec 13

1/21

UNITED STATES DISTRICT COURTEASTERN DISTRICT OF NEW YORK-------------------------------------------------------XUNITED STATES OF AMERICA,

v.

SEYMOUR (JIMMY) EISENBERG,Defendant.

-------------------------------------------------------X

10-CR-600 (DLI)

DEFENDANTS SENTENCING MEMORANDUM

John C. Meringolo, Esq.Meringolo Law375 Greenwich St., 7thFl.New York, NY 10013(347) [email protected]

Attorney for Seymour Eisenberg

Case 1:10-cr-00600-DLI Document 332 Filed 12/02/13 Page 1 of 21 PageID #: 1970


2/21

2

INTRODUCTION

On December 17, 2013, Seymour (Jimmy) Eisenberg, a 70-year-old first-time offender,

will appear before this Court to be sentenced based upon his plea of guilty to Counts One, Three,

and Five of the above-captioned indictment. Based on the facts and circumstances of Mr.

Eisenbergs plea and on Mr. Eisenbergs personal history and character, the defense respectfully

requests that the Court impose a non-incarceration sentence.

OFFENSE CONDUCT

On October 21, 2011, Mr. Eisenberg pled guilty to his first and only offense in his 70

years, admitting the allegations in Count One (Conspiracy to Commit Securities Fraud), Count

Three (Securities Fraud), and Count Five (Money Laundering Conspiracy), arising out of his role

as the President of Asset Management and that corporations role in the Spongetech fraud

scheme set forth in the Superseding Indictment. As detailed in the Plea Agreement, Mr.

Eisenberg faces a maximum term of imprisonment of five years on Count One and 20 years on

Counts Three and Five. There is no minimum term of imprisonment.

At his plea hearing, Mr. Eisenberg admitted that he had committed the overt acts detailed

in paragraphs 25(f) and (g) of the Superseding Indictmentsigning (on July 27, 2009) a

document that falsely indicated that a loan had been made on February 16, 2008 from Asset

Management to Spongetech in the amount of $30,000 and, on the same date, signing a letter to

an attorney requesting that the attorney issue a legal opinion letter so that shares of Spongetech

stock could be unrestricted based on the false February 16, 2008 loan agreement. Mr. Eisenberg

accepted responsibility for his actions and admitted that he knew what he had done was wrong.1

1Although he accepts responsibility for his actions, Mr. Eisenberg respectfully submits that hewas not involved in the conduct set forth as a specific example in paragraph 18 of the



3/21

3

GUIDELINES OFFENSE LEVEL CALCULATION

At the plea hearing, the parties agreed that a base offense level of 37 in Criminal History

Category I, with a resulting range of 210-262 months of imprisonment, appeared to be

appropriate. However, based on subsequent information, the parties agree that this range is too

high. The parties differ as to the appropriate Guidelines level, as set forth below.

The Addendum to the Presentence Report2calculates a total offense level of 30 in

Criminal History Category I, with a resulting range of 97-121 months as follows:

Counts One and Three:

Base Offense Level (U.S.S.G. 2X1.1(a) and 2B1.1(a)) 6Specific Offense Characteristics (loss between $7 million and $20 million) (U.S.S.G. 2B1.1(b)(1)(K))

+ 20

Specific Offense Characteristics (scheme to defraud 6,000 stockholders) (U.S.S.G. 2B1.1(b)(2)(C))

3

+ 6

Adjusted Offense Level (Subtotal) 32

Count Five:

Base Offense Level (U.S.S.G. 2S1.1(a)(1)) 32

Specific Offense Characteristics (defendant convicted under 18 U.S.C. 1957)(U.S.S.G. 2S1.1(b)(2)(A))

+ 1


Multiple-Count Adjustment (U.S.S.G. 2S1.3):

Presentence Report and states that, on the documents involved in that particular transfer of 22million shares, his signature was forged.2The original Presentence Reports calculation of an offense level of 34 and sentencing range of151-188 months (Criminal History Category I) was modified after both the government and thedefense submitted corrections stating that the calculation was too high. Specifically, both partiesobjected to the Probation Departments inclusion of a 4-level enhancement pursuant to U.S.S.G. 2B1.1(b)(18)(A)(i) because Mr. Eisenberg was not an officer of a publicly traded company.3Both the government and the defense objected to this enhancement, which the ProbationDepartment nevertheless retained. SeePSR Addendum page 2 paragraph 2. The governmentnow appears to have adopted the Probation Departments calculation (seegovernmentssentencing submission at page 4), but the defense continues to object to the applicability of thisenhancement, as argued herein on page 4, below.



4/21

4

Highest Adjusted Offense Level 33

Total Number of Units 1

Increase in Offense Level (U.S.S.G. 3D1.4) 0

Combined Adjusted Offense Level 33

Acceptance of Responsibility (U.S.S.G. 3E1.1(a)) - 2

Timely Entrance of Plea (U.S.S.G. 3E1.1(b)) - 1Total Offense Level 30

The defense respectfully submits that the Presentence Reports calculation is erroneous

because the Spongetech shares were traded in bulk, and therefore there were only between 10

and 50 victims of the conspiracy, not 6,000. In further support of this lower number of victims,

the governments Response to Eisenbergs Objections to the PSR notes that, Eisenberg

facilitated sales of unlawfully unrestricted shares to approximately 30 individuals or entities

through Asset Management. Further, the government has no information connecting

Eisenberg to Spongetechs fraudulent efforts to defraud the marketplace by publicly

announcing inflated sales figures. Letter from U.S Attorneys Office to Probation Officer

John Lanigan dated July 9, 2013 at page 2 (emphasis supplied).

The defense notes that the governments sentencing submission now appears to take a

contradictory position, asserting that, While [the] government acknowledges that shares

unrestricted through Eisenbergs shell company, Asset Management, were sold to approximately

30 individuals or entities, these individuals were then able to sell the unrestricted shares into

the larger marketplacewhere shareholders were victimized. Governments Sentencing

Submission at page 4 (emphasis supplied). In response, the defense respectfully suggests that,

although perhaps technically accurate based on the broad language of U.S.S.G. 2B1.1(b)(2)(C)

and the victim definition in the corresponding Application Note (any person who sustained

any part of the actual loss determined under subsection (b)(1)), adoption of this calculation

effectively makes Mr. Eisenberg responsible for the losses sustained through actions of the 30



5/21

5

individuals who bought the shares that had been unrestricted through Asset Management. These

30 investors are not alleged to have been his co-conspirators and are individuals over whom he

had no control. Mr. Eisenberg could not have foreseen exactly how the shares would

subsequently be resold, or the number of individuals who would come into contact with the

Spongetech fraud. To sentence him based on these third-hand (or later) investors losses may be

within the letter of the law, as the Probation Department argues. However, the defense

respectfully submits that the governments original position, which acknowledged Mr.

Eisenbergs more limited responsibility, is closer to the spirit of the law and the commands of 18

U.S.C. 3553.

The defense also respectfully submits that a minimal role adjustment would be proper.

Therefore, the defense calculates that Mr. Eisenbergs applicable offense level is 22, with a

resulting range of 41-51 months of imprisonment:


Base Offense Level (U.S.S.G. 2X1.1(a) and 2B1.1(a)) 6

Specific Offense Characteristics (loss between $7 million and $20 million) (U.S.S.G. 2B1.1(b)(1)(K)) + 20

Specific Offense Characteristics (scheme to defraud between 10 and 50 stockholders)(U.S.S.G. 2B1.1(b)(2)(A))

+ 2

Mitigating Role (minimal role adjustment) (U.S.S.G. 3B1.2(a)) - 4


Count Five:


Specific Offense Characteristics (defendant convicted under 18 U.S.C. 1957)(U.S.S.G. 2S1.1(b)(2)(A)) + 1






6/21

6





Timely Entrance of Plea (U.S.S.G. 3E1.1(b)) - 1

Total Offense Level 22

Although the governments sentencing submission has now taken a contrary position,

according to its objections to the Presentence Report and its response to Mr. Eisenbergs

objections thereto, the government agreed with Mr. Eisenbergs objections to the Presentence

Reports calculation, with the exception of Mr. Eisenbergs eligibility for a minimal role

reduction, and suggested that a level of 26, with a Guidelines range of 63-78 months would be

appropriate, calculated as follows:


Base Offense Level (U.S.S.G. 2X1.1(a) and 2B1.1(a)) 6

Specific Offense Characteristics (loss between $7 million and $20 million) (U.S.S.G. 2B1.1(b)(1)(K))

+ 20

Specific Offense Characteristics (scheme to defraud between 10 and 50 stockholders)(U.S.S.G. 2B1.1(b)(2)(A))

+ 2


Count Five:


Specific Offense Characteristics (defendant convicted under 18 U.S.C. 1957)(U.S.S.G. 2S1.1(b)(2)(A))

+ 1








Timely Entrance of Plea (U.S.S.G. 3E1.1(b)) - 1



7/21

7

Total Offense Level 26

The foregoing calculations notwithstanding, the Probation Department recommends a

sentence of 12 months and one day. Based on Mr. Eisenbergs mental health, age, and status as a

first-time offender, the defense respectfully petitions the Court to depart from the Guidelines and

to impose a non-incarceration sentence.

The defense notes that, based on the legal authority set forth below, the Court is

empowered to impose a non-Guidelines sentence in order to avoid the utter travesty of justice

that sometimes results from the guidelines' fetish with absolute arithmetic, as well as the harm

that guideline calculations can visit on human beings if not cabined by common sense. United

States v. Parris, 573 F. Supp. 2d 744, 751 (E.D.N.Y. 2008) (quoting Judge Rakoff in United

States v. Adelson, 441 F. Supp. 2d 506, 512 (S.D.N.Y. 2006)).

OVERVIEW OF RELEVANT LEGAL AUTHORITY

I. The Court Has Significant Discretion to Impose an Appropriate Sentence.The Court shall impose a sentence sufficient, but not greater than necessary, . . . [and]shall consider

1. The nature and circumstances of the offense and the history and characteristics ofthe defendant;

2. The need for the sentence imposeda. To reflect the seriousness of the offense, to promote respect for the

law, and to provide just punishment for the offense;

b.

To afford adequate deterrence to criminal conduct;

c. To protect the public from further crimes of the defendant;d. To provide the defendant with needed educational or vocational

training, medical care, or other correctional treatment in the mosteffective manner;



8/21

8

3. The kinds of sentences available;4. The kinds of sentence and the sentencing range established . . . [by the Sentencing

Guidelines];

5.

Any pertinent policy statement . . .

6. The need to avoid unwarranted sentence disparities among defendants withsimilar records who have been found guilty of similar conduct; and

7. The need to provide restitution to any victims of the offense.18 U.S.C. 3553(a) (some minor alterations not noted).

Though the Guidelines are an important factor in the sentencing analysis, they are

advisory and the Court is generally free to impose a non-Guidelines sentence. United States v.

Gall, 128 S. Ct. 586 (2007); United States v. Booker, 543 U.S. 220 (2005). The sentencing

judge should decide, after considering the Guidelines and all the other factors set forth in section

3553(a), whether (i) to impose the sentence that would have been imposed under the Guidelines,

i.e.,a sentence within the applicable Guidelines range or within permissible departure authority,

or (ii) to impose a non-Guidelines sentence. United States v. Crosby, 397 F.3d 103, 113 (2d

Cir. 2005);see also United States v. Castillo, 460 F.3d 337, 352 (2d Cir. 2006).

In an en bancopinion, the Second Circuit reaffirmed that [a] sentencing judge has very

wide latitude to decide the proper degree of punishment for an individual offender and a

particular crime. United States v. Cavera, 550 F.3d 180, 188 (2d Cir. 2008) (en banc) (italics

supplied). The Caveracourt elaborated as to the proper role of the Guidelines in the sentencing

calculus and a district courts concomitant authority to issue a non-Guidelines sentence:

The Guidelines provide the starting point and the initial benchmark forsentencing, Gall,128 S. Ct. at 596, and district courts must remain cognizant ofthem throughout the sentencing process, id. at 596 n. 6. It is now, however,emphatically clear that the Guidelines are guidelinesthat is, they are truly

advisory. A district court may not presume that a Guidelines sentence isreasonable; it must instead conduct its own independent review of the



9/21

9

sentencing factors, aided by the arguments of the prosecution and defense .District judges are, as a result, generally free to impose sentences outside the

recommended range. When they do so, however, they must consider the extentof the deviation and ensure that the justification is sufficiently compelling tosupport the degree of the variance. Id.at 597. In this way, the district court

reaches an informed and individualized judgment in each case as to what issufficient, but not greater than necessary to fulfill the purposes of

sentencing. 18 U.S.C. 3553(a).

Cavera, 550 F.3d at 189 (emphasis supplied) (footnotes omitted).

In Cavera, the Court of Appeals made clear that it would not substitute [its] own

judgment for the district courts on the question of what is sufficient to meet the 3553(a)

considerations in any particular case. Cavera, 550 F.3d at 189. The Court emphasized that it

would not second-guess the determinations of the District Court: To the extent that our prior

cases may be read to imply a more searching form of substantive review, we today depart from

that understanding. Cavera550 F.3d at 189.

The Supreme Court confirmed Caveras approach inNelson v. United States, 129 S. Ct.

890 (2009), and Spears v. United States, 129 S. Ct. 840 (2009). InNelson, the Court instructed

that:

[T]he sentencing court does not enjoy the benefit of a legal presumption that theGuidelines sentence should apply. Instead, the sentencing court must firstcalculate the Guidelines range, and then considerwhat sentence is appropriate forthe individual defendant in light of the statutory sentencing factors, 18 U.S.C. 3553(a), explaining any variance from the former with reference to the latter.

Nelson, 129 S. Ct. at 891-92 (internal citations omitted). Thus, [t]he Guidelines are not only not

mandatoryon sentencing courts; they are also not to bepresumedreasonable. Nelson, 129 S.

Ct. at 892 (emphasis in original).

II. Mental Health Concerns Provide a Basis for a Non-Incarceration Sentence.The Sentencing Guidelines provide that Mental and emotional conditions may be

relevant in determining whether a departure is warranted, if such conditions, individually or in



10/21

10

combination with other offender characteristics, are present to an unusual degree and distinguish

the case from the typical cases covered by the guidelines. U.S.S.G. 5H1.3, Policy Statement.4

Interpreting 5H1.3, the Second Circuit has held that there are indeed certain situations where a

person's mental and emotional conditions may be taken into account in granting a downward

departure. See United States v. Rivera,192 F.3d 81, 85 (2d Cir.1999); cf. United States v. Lara,

905 F.2d 599, 603 (2d Cir.1990) (noting that in some cases, extraordinary situations warrant

consideration of ordinarily irrelevant factors). United States v. Brady, 417 F.3d 326, 333 (2d

Cir. 2005).

Similarly, a request for a non-incarceration sentenced based on the defendants

diminished mental capacity may be warranted if (1) the defendant committed the offense while

suffering from a significantly reduced mental capacity; and (2) the significantly reduced mental

capacity contributed substantially to the commission of the offense. U.S.S.G. 5K2.13 Policy

Statement. A significantly reduced mental capacity exists when the defendant, although

convicted, has a significantly impaired ability to (A) understand the wrongfulness of the behavior

comprising the offense or to exercise the power of reason; or (B) control behavior that the

defendant knows is wrongful. U.S.S.G. 5K2.13, Application Note 1.

A significantly reduced mental capacity is the exception to the general rule that 'mental

and emotional conditions are not ordinarily relevant. United States v. Silleg,311 F.3d 557, 562

(2d Cir. 2002). To establish diminished capacity . . . a defendant need only persuade a judge by

a preponderance of the evidence that he suffers from reduced mental capacity and that a causal

link [exists] between that reduced capacity and the commission of the charged offense. United

4Mental and emotional conditions may [also] be relevant in determining the conditions ofprobation or supervised release; e.g., participation in a mental health program (see 5B1.3(d)(5)and 5D1.3(d)(5)). U.S.S.G. 5H1.3 Policy Statement.



11/21

11

States v. Ventrilla,233 F.3d 166, 169 (2d Cir. 2000) (internal citations omitted).

III. Age Provides a Basis for a Non-Incarceration Sentence.Mr. Eisenberg is seventy years of age. Because of a combination of his age, his mental

illness, and the other factors presented by his actions in this case, we respectfully request a non-

incarceration sentence. His advanced age is one factor that the Guidelines recognize is relevant

to this request.

Age . . . may be relevant in determining whether a departure is warranted, if

considerations based on age, individually or in combination with other offender characteristics,

are present to an unusual degree and distinguish the case from the typical cases covered by the

guidelines. Age may be a reason to depart downward in a case in which the defendant is elderly

and infirm and where a form of punishment such as home confinement might be equally efficient

as and less costly than incarceration. U.S.S.G. 5H1.1 Policy Statement.

[S]entencing courts are permitted to take into account a defendant's age and frailty.United States v. Barbato, 2002 WL 31556376 at *5 (S.D.N.Y., Nov. 15, 2002) (quotingUnited

States v. Gigante, 989 F. Supp. 436, 443 (E.D.N.Y. 1998)). The defendant inBarbato, an 81-

year-old man with no prior criminal record, was charged with extortion after threatening a man

to recover money that was allegedly owed to the defendant. That court considered the advanced

age of the defendant, as well as his medical history, and granted a seven-level downward

departure from the applicable Guideline. Barbato, 2002 WL 31556376 at *5. Mr. Eisenberg, a

70-year-old man with no prior criminal history and with significant mental health issues, pled

guilty to a non-violent (white collar) offense, for which a sentence of home confinement or

probation would be effective. Therefore, the Court would be well within its discretion to apply a

downward adjustment to Mr. Eisenbergs sentence.



12/21

12

IV.Aberrant Behavior Provides a Basis for a Non-Incarceration Sentence.A non-incarceration sentence is also proper because the instant offense represents

aberrant conduct.

The sentencing court may depart from the applicable guideline range if . . . the

court finds, pursuant to 18 U.S.C. 3553(b)(1) that there exists an aggravating ormitigating circumstance . . . of a kind, or to a degree, not adequately taken into

consideration by the Sentencing Commission in formulating the guidelines that, in

order to advance the objectives set forth in 18 U.S.C. 3553(a)(2), should result

in a sentence different from that described.

U.S.S.G. 5K2.0(a)(1)(A).

The court may depart downward [based on a defendants aberrant behavior] only if the

defendant committed a single criminal occurrence or single criminal transaction that (1) was

committed without significant planning; (2) was of limited duration; and (3) represents a marked

deviation by the defendant from an otherwise law-abiding life. U.S.S.G. 5K2.20(b) Policy

Statement. In determining whether the court should depart under this policy statement, the

court may consider the defendants (A) mental and emotional conditions; (B) employment

record; (C) record of prior good works; (D) motivation for committing the offense; and (E)

efforts to mitigate the effects of the offense. U.S.S.G. 5K2.20 Application Note 3.

The single criminal occurrence or single criminal transaction requirement has been

relaxed. See United States v. Hued, 338 F. Supp. 2d 453, 458-59 (S.D.N.Y. 2004) (finding that

the defendants ill-considered decision to allow Saltares and his possessions to remain in her

home [for a three-week period before her arrest] constituted a single course of conduct and single

crime, the Court concludes that Hued is guilty only of a single criminal occurrence.)

* * *



13/21

13

With this legal framework in mind, in the following section we discuss the facts that bear

upon the factors set forth in 18 U.S.C. 3553(a), and, in particular, urge the Court to consider

Mr. Eisenbergs poor mental health, his age, and his status as a first-time offender.

INFORMATION RELEVANT TO THE 18 U.S.C. 3553(A) FACTORS

I. The Nature and Circumstances of the OffenseMr. Eisenberg admitted that he had engaged in the charged offense conduct in his role as

President of Asset Management, a shell company established at the behest of his co-defendant

Steven Moskowitz in order to perpetrate the Spongetech stock fraud scheme. Specifically, Mr.

Eisenberg signed a document that falsely indicated that a loan had been made on February 16,

2008 from Asset Management to Spongetech in the amount of $30,000 and signed a letter to an

attorney requesting that the attorney issue a legal opinion letter so that shares of Spongetech

stock could be unrestricted based on the false February 16, 2008 loan agreement. Mr.

Eisenbergs conduct marks a departure from his otherwise law-abiding life.

Mr. Eisenberg committed these actions while suffering from severe bipolar disorder and

the stress of financial ruin caused by his gambling losses. He explained that, after he lost $1

million and his house in an undiagnosed manic episode, he wrote to friends explaining the

situation and asking for work. Through a friend, he was introduced to Steven Moskowitz, the

owner of Spongetech, who gave Mr. Eisenberg a space to day-trade and later involved him in the

fraud to which he has now pled guilty.

II. The History and Characteristics of Mr. EisenbergMr. Eisenberg appears before the Court for sentencing as a 70-year-old first-time

offender who committed the instant offense while suffering from bipolar disorder and the stress



14/21

14

of having lost substantially all of his savings due to uncontrolled gambling behavior during

manic episodes.

Early Years and Education

Mr. Eisenberg, a lifelong New York resident, is the son of Murray Leonard Eisenberg (d.

1982) and the former Sarah Sternfeld (d. 1996). His father was a purchasing agent for an

electrical contracting firm and his mother was a part-time bookkeeper at a hotel in the summers.

He has a younger brother, Teddy, and two sisters, Florence and Harriet. All three of his siblings

are now retired.

Mr. Eisenberg describes his early years as not great, because of a demanding father and

a lack of affection from his mother. The relationship between Mr. Eisenberg and his parents

improved after his parents moved to Israel when Mr. Eisenberg was 45 years old. Additionally,

Mr. Eisenbergs relationships with his siblings were strained, although he describes the

relationship with Florence as very close today.

After graduating from Far Rockaway High School, Mr. Eisenberg earned approximately

40 credits from Brooklyn College. He did not finish college, and attributes this to an inability to

focus for long periods of time, a potential early manifestation of his later mental health problems.

Work

From approximately 1976 or 1977 until 2000, Mr. Eisenberg worked as the owner of

UBS and Joy Distributors, d/b/a Joy Distributors, a wholesale candy-repackaging business. He

quit that business in 2001 and lived on saved money and money earned as a day-trader for

several years before becoming involved with Spongetech in January 2008.

Mr. Eisenberg currently works for Mr. Broadway Restaurant as a delivery person and a

Kosher supervisor, earning $8 per hour and approximately $80 to $100 per week in delivery tips.



15/21

15

He works six days per week from 7:00 am until 2:00 pm and many additional evenings from

10:00 pm until 12:30 am. In prior years, he supplemented his income with collecting cans and

bottles to redeem. He also receives Social Security payments of $852 per month. Mr. Eisenberg

characterizes his situation as lucky because is often able to eat at the restaurant. His employer

calls Mr. Eisenberg trustworthy, reliable, and personable and writes that Mr. Eisenbergs

responsibility, [sic] has made him an asset to our restaurant. SeeExhibit A, Letter from Moti

Silber dated May 7, 2013.

Family

Mr. Eisenberg is separated from his wife of 48 years, Bella Wein, and from their disabled

42-year-old son, Uri. He explained that he separated from his wife about four years ago after

they had a series of arguments about their sons care. Mr. Eisenberg now has a good relationship

with Bella and with Uri and believes that it would be mentally devastating for them if he were

sentenced to a term of imprisonment.

At his Presentence Interview, Mr. Eisenberg stated that he believed that he had not been

as good a father to his son as he wished in retrospect to have been, and attributed this to his own

upbringing. He explained that he is less critical and not as strict with Uri now and that he has

come to recognize the severity of Uris disability, an unidentified internal bleeding disorder that

makes it impossible for Uri to leave the house or work.

Bella does not work. She and Uri live off of savings, Social Security, and food stamps.

Mr. Eisenberg gives them his extra food stamps when he can. Bella writes that she was

diagnosed with serious illnesses shortly after their marriage and that, I couldnt begin to explain

what Jimmy sacrificed, and how he took care of me, throughout the many years of our

marriage. Exhibit B, Letter from Bella Eisenberg at 1.



16/21

16

Mr. Eisenbergs religious leader, Rabbi Yoel Schonfeld describes Mr. Eisenberg as a

member in our synagogue for close to thirty five years. During that time, Mr. Eisenberg was an

upstanding individual who was always willing to lend a hand when called upon . . . [and] a

dedicated family man who worked hard to support his wife and son. Exhibit C, Letter from

Rabbi Yoel Schonfeld, dated May 20, 2013. His friend Alex Schechter agrees that Jimmy is a

generous and sincere person and a dear friend not only to me but to all of those in our

community. . . . I consider Jimmy to be an honest, faithful and true friend. Exhibit D, Letter

from Alex Schechter.

Mental Health and Diminished Capacity

Mr. Eisenberg had a mental breakdown in 2004 and was diagnosed as manic-depressive

with many symptoms of bipolar disorder. In 2006, after two years of mental breakdowns, Mr.

Eisenberg was diagnosed with bipolar disorder. He is currently on medications including

Ramipril, Klonopin, Zoloft, and Ambien and sees a psychiatrist every other week. 5

Due to his manic episodes, while inadequately medicated, Mr. Eisenberg lost all of his

money in Atlantic City and accumulated large gambling debts.6 He was forced to sell his house

to cover some of his debts and still has outstanding debts to other creditors. Mr. Eisenberg

explained that when he was in the midst of a manic episode, he felt untouchable and was

unaware of the consequences of his actions. During this period, Tina Machnikoff, Licensed

Clinical Social Worker, and John Connors, MD, wrote that Mr. Eisenberg suffers from Bipolar

Disorder II and frompathological gambling. Exhibit E, Letter from the Tina Machnikoff,

LCSW and John Connors, MD (Pride of Judea Community Services), dated October 11, 2006

5Mr. Eisenberg is also on a series of medications for physical ailments including hypertensionand diabetes.6The Presentence report lists eight outstanding judgments against Mr. Eisenberg totaling$374,932 caused by his actions due to this gambling addiction. See PSR at 90.



17/21

17

(emphasis in original). In fact, he continued to gamble despite attending Gamblers Anonymous

meetings, which Ms. Machnikoff and Dr. Connors wrote, speak[s] more of an addiction to his

gambling pathology than to his manic behavior. Exhibit E. As Bella Eisenberg explains, Mr.

Eisenberg developed an exaggerated and unrealistic optimism about his gambling that

ultimately led to him losing all of our life savings of over a million dollars. Exhibit B, Letter

from Bella Eisenberg at 3.

After losing everything, Mr. Eisenberg wrote to friends asking for assistance and was

eventually introduced to Steven Moskowitz, who gave him a desk at Spongetech and periodic

cash payments of a few hundred dollars. Mr. Eisenbergs son Uri writes: As a son, I cannot

help but think often of my fathers happiness in life, and the many challenges and sorrows that he

has recently gone through. Starting with his condition of Bi-Polar Disorder, his life, as well as

that of my mother, was turned upside down. The loss of all of his finances, after a life of hard

work and careful saving, has brought fear and worries that continue to this day. Yet greater than

his sorrow and regret regarding his actions that brought that [loss] about, is his pain and regret

over his involvement with Spongetech. Exhibit F, Letter from Uri Eisenberg.

Mr. Eisenberg attributes his involvement in the instant offense to his bipolar disorder and

the concurrent tunnel vision concentration that he experienced. He explained that, after he began

day-trading at Spongetech, he concentrated only on his trading, signing papers that were handed

to him without reading them or even looking up. Although he admits that he should have been

more careful and accepts responsibility for his conduct (signing the fraudulent documents), Mr.

Eisenberg asks the Court to consider that he committed the offense during a period in which his

mental disorder was not adequately treated and his symptoms were not controlled.

One of Mr. Eisenbergs treating psychiatrists has written that:



18/21

18

It is my medical and psychiatric opinion that Mr. Eisenbergs conditionbipolardisorder in remission coupled with chronic anxiety and Adult ADDH hascontributed to the state of affairs in his present legal case. He admits to signingpapers that were put in front of him without a thorough review of such papers, notthoroughly reviewing any documents, tables and papers presented to him and

feeling overwhelmed and anxious during the time that he worked at his job. . . . Inconclusion, Mr. Eisenbergs complicated psychiatric history and presentation is adefinite contributory factor which should be strongly considered in this case.

Exhibit G, Letter from Dr. Cynthia D. Barnes, MD.

Similarly, Bella Eisenberg writes that, Even though [Mr. Eisenberg] finally got a job in

January 2008 as a salesman for Spongetech Products, his manic behavior was getting worse. By

May 2009 it had reached the point where I could no longer deal with his behavior, and so we

separated. Exhibit B at 3. She continues: I truly feel that had Jimmy not been so ill at the

time, a man who did so well in business and was so bright would have been at least somewhat

aware of what was truly going on, and would have questioned what was given to him to do. . . . I

know that Jimmy feels terrible regret for his actions. Exhibit B at 3.

Aberrant Behavior

Mr. Eisenberg respectfully asks the Court to consider that the instant offense represents

an aberration in an otherwise law-abiding life. As detailed in this submission to Your Honor and

in the letters submitted by his family and friends, Mr. Eisenberg is a good husband and father

whose mental illness led him down a path that he now deeply regrets.

The current crime represents Mr. Eisenbergs only aberrant act in an otherwise law-

abiding life. The offense was committed without significant planning because Mr. Eisenberg has

explained that he did not read the papers that were given to him to sign and that he felt anxious

and overwhelmed at the time. A significant portion of Mr. Eisenbergs conduct may be

attributed to his impaired mental state, as described by Dr. Barnes. SeeExhibit G. In addition,

Mr. Eisenbergs criminal actions were of limited duration compared to the long arc of his



19/21

19

professional career over the past 35 years. Moreover, Mr. Eisenbergs involvement in the

Spongetech fraud began after he gambled away his home and all of his savings under the

influence of his mental illness. He was introduced to Steven Moskowitz at a vulnerable time in

his life and unfortunately committed the acts that led to the instant prosecution, which he now

deeply regrets.

Mr. Eisenberg writes to the Court: I find myself with deep regret and sorrow for any

harm I may have caused, whether financially, emotionally, or otherwise, to anyone who has

suffered because of my actions. Since this type of behavior has never been a part of my psyche,

it only compounds the pain that I will have to life with for the rest of my life for the harm and

agony I have caused. I ask the Court for mercy as your Honor determines my sentence. Exhibit

H, Letter from Seymour Jimmy Eisenberg at 2.

III.Additional Factors Under 18 U.S.C. 3553(a)With respect to the remaining factors set forth in 18 U.S.C. 3553(a), we believe that a

sentence of probation or, in the alternative, home confinement, would be sufficient but not

greater than necessary to satisfy the purposes of the statute.

Considering the need for the sentence imposed to reflect the seriousness of the offense, to

promote respect for the law, and to provide just punishment, the defense submits that Mr.

Eisenberg is aware of the seriousness of the offense and deeply regrets his conduct. He pled

guilty early on and has worked as a law-abiding citizen for years while on bail awaiting the

outcome of this case.

With regard to the need to deter criminal conduct and to protect the public from future

crimes by this defendant, we think that the Court can rest assured that Mr. Eisenberg will not

again appear before this Court as a defendant in a criminal case. While in pretrial detention, Mr.



20/21

20

Eisenberg was assaulted by another inmate and then placed in the Special Housing Unit for his

own protection. SeeExhibit I, MDC Administrative Detention Order dated October 29, 2010.

Mr. Eisenberg still has nightmares about the assault and significant fears of a return to prison. At

his Presentence Interview, he stated that he has begun to see his psychiatrist more frequently

because he is having trouble sleeping and is concerned for his safety in prison. Certainly, a

period of incarceration is not necessary to provide for individual deterrence.

As for the kinds of sentences available, now that the Guidelines are advisory, the Court is

free to impose any type of sentence that it deems appropriate and reasonable. Concerning the

need to avoid unwarranted sentence disparities among defendants with similar records who have

been found guilty of similar conduct, the Supreme Courts express sanction to take the

Guidelines as advisory is indicative that this Court may fashion a sentence that addresses the

unique circumstances of this case without fear that an unreasonable disparity will result.

Moreover, given the sentences imposed on Mr. Eisenbergs co-defendants in this case, the

defense respectfully submits that a non-incarceration sentence would meet the ends of justice as

to Mr. Eisenberg.

* * *

The Supreme Courts instruction that the Guidelines are advisory, and that the district

court has broad discretion in sentencing indicates that a sentence based on the circumstances of

the offense and the offender, rather than on an automatic calculation is warranted here. As

outlined above, Mr. Eisenberg is a 70-year-old first-time offender with a significant history of

mental illness. Given his age and his critically ill mental health, a sentence of incarceration, in

our view is greater than necessary to satisfy the objectives of 18 U.S.C. 3553(a).

In light of all of the above, we request that, in fashioning an appropriate sentence for Mr.



21/21

Eisenberg, the Court consider the totality of the circumstances and impose a non-Guidelines

sentence.

CONCLUSION

Consequently, for all of the foregoing reasons, we respectfully request that the Court

impose a sentence that adequately addresses the specific circumstances of this case.

Respectfully,

____/s/_______John C. Meringolo

Cc: AUSA Nathan Daniel Reilly (by ECF)AUSA Ilene Weininger Jaroslaw (by ECF)AUSA Patrick Sean Sinclair (by ECF)


USA v. Metter Et Al Doc 332 Filed 02 Dec 13

Documents

Transcript of USA v. Metter Et Al Doc 332 Filed 02 Dec 13